Key takeaways:
- Analysts at Bitwise believe selling pressure has peaked, indicating that price dips present an excellent opportunity to buy.
- Smaller Bitcoin holders are increasing their accumulation even amid rising deposits from miners.
Recent downturns in the value of Bitcoin (BTC) have reduced interest levels, as evidenced by Google searches related to the cryptocurrency hitting a multi-month low. Sentiment readings reflect a trend typically seen in bearish market conditions, highlighting a general sense of caution.
Cointelegraph previously reported that the Crypto Fear & Greed Index has decreased to a level of 24, categorized as ‘Fear,’ marking its lowest point in a year—down from a recent ‘Greed’ reading of 71. This drop in sentiment parallels declines seen earlier in the year and is reminiscent of market fatigue cycles observed in 2018 and 2022.
Panic could be an opportunity for Bitcoin, say Bitwise analysts
Despite notable declines in sentiment, analysts from Bitwise are confident that the current market conditions favor accumulation rather than retreat. Director and Head of Research André Dragosch, Senior Research Associate Max Shannon, and Research Analyst Ayush Tripathi point out that the recent correction has been driven largely by external factors, including renewed trade tensions between the U.S. and China, which has led to widespread risk aversion.
A recent weekly crypto market compass report from Bitwise indicated that the price correction was intensified by an unprecedented wave of futures liquidations, with Bitcoin’s perpetual futures open interest plummeting by nearly $11 billion, representing the highest decline on record.
Dragosch noted that this forced liquidation event has significantly reduced selling pressure, paving the way for a potential buying opportunity, akin to the Yen carry trade unwind that occurred in August 2024.
“Our internal Cryptoasset Sentiment Index has reached its lowest levels since that period,” Dragosch reported, adding, “Historically, such extremes have represented advantageous entry points before seasonal strength in Q4.”
Smaller Bitcoin holders are stepping up amid mounting pressure from miners
Onchain data confirms that smaller Bitcoin holders (those with between 1 and 1,000 BTC) have been increasing their purchases in recent days, compensating for the reduced interest from larger holders. This trend hints at a resurgence in confidence among retail and mid-tier investors amid ongoing market fluctuations.
Conversely, other indicators suggest complexities in the current market dynamics. Data from CryptoQuant indicates that recent significant inflows from miners, totaling approximately 51,000 BTC (over $5.7 billion), are now being channeled into exchanges—marking the largest influx since July. Such movements typically foster sell-side pressure, as miners often shift assets to exchanges for liquidation or hedging purposes.
Similarly, long-term holders appear to be parting with their assets, with data revealing that 265,715 BTC have been sold in the past 30 days, representing the most considerable monthly outflow since January 2025.
Despite this, Bitcoin’s persistent stability around the $110,000 mark suggests that institutional or exchange-traded fund (ETF) demand may be absorbing excess supply. These contrasting flows indicate the market may be shifting from capitulation to reaccumulation—a scenario that Bitwise analysts foresee as conducive to a bullish Q4.
This article does not constitute investment advice. All investments and trades carry risks, and readers are encouraged to perform due diligence before making investment decisions.
